General Automation Inc. said Wednesday that it trimmed third-quarter losses to $3.3 million from $4.5 million a year earlier, and appears headed for profitability in the current quarter on the strength of gains from its recent restructuring.
The company also announced that it plans to cut short by more than a month the current fiscal year, a period marked by a major overhaul in its makeup and capital structure.
The Anaheim-based computer maker posted revenue of $8.1 million for the quarter ended May 3, compared with $13.6 million a year ago.
The results from last year include $6.1 million in sales from the recently divested components group, a spokesman said.
For the nine months of the fiscal year, the company lost $4.5 million, compared with losses of $6.7 million during the period a year earlier. Revenues were $24.8 million, a 43% drop from the $43.7 million recorded last year.
All but $400,000 of the drop in sales for the three-quarter period can be attributed to the loss in sales from the divested components group, said John D. Murray, vice president of finance.
Earlier this month, General Automation eliminated nearly all of its long-term debt and said it is seeking approval from the Securities and Exchange Commission to issue 1.5 million shares of common stock.
The company has been working to sell the manufacturing and development arms of its minicomputer business to an unidentified Orange County company. General Automation will continue to market the minicomputer line after divestiture, expected to be completed sometime this summer.
Company executives believe that divestiture will allow General Automation to focus on its new Zebra family of microcomputers. And they hope that the new capital structure can remove at least some of the obstacles to product sales. Company Chairman Leonard N. Mackenzie has said that the company's overwhelming debt and persistent losses have frightened potential customers and drained valuable resources.
The current fiscal year now is scheduled to close at the end of this month instead of Aug. 2, as in previous years.
"The closing of the year at June 30 will allow the company to close its restructuring and commence its new year with a total focus on its restructured business," Mackenzie said.
The capital restructuring should net the company a $9.5-million extraordinary gain, which is scheduled to appear on the books for the current quarter, Mackenzie said.
Earlier this month, the company renegotiated a $15-million bank debt, leaving only $1.3 million outstanding in long-term debt and about $2 million in other debt.